Real Estate commissions can be a little unclear and confusing and we want to clear that up.

Many buyers and sellers are unsure what they are actually paying for, so we’ve put together this list to review the main costs, covered by the realtor, to explain what your funds are going towards.

Brokerage fees

The majority of brokerages charge a 50% fee on all commissions.

This covers administrative costs, some marketing, advertising, and some signage.

As each brokerage is different, so will be the fees and services included, but for the most part, you can expect that your agent is paying the brokerage 50% of the commissions they’ve earned.

Photos and videos

Professional photos, video tours, and drone videos are at the sole cost of the agent. This often also includes costs associated with staging your home.

Hiring a professional photographer will ensure your home shows its best and is marketed first-rate, gaining the interest of as many buyers as possible.

MLS, Real Estate Board, Licensing, etc.

Realtors using the MLS system are required to pay an annual fee. MLS is the most well-known home searching website and your agent will need access to this to ensure a quick sale.

Realtors are also required to pay licensing and insurance fees, which are renewed every 2 years.

Additionally, agents need to pay annual dues to their local real estate board and are required to complete numerous educational courses, at their own cost, each year to ensure their license remains in good standing.

Advertising

Any additional advertising by your agent will be at their costs. If your agent offers to advertise on their social media pages, they are likely paying a social media manager or using plenty of their free time to ensure your listing is shared as widely as possible.

Signage

While some brokerages offer signage, not all of them do. And if your agent wants personalized signage, this will come at their cost.

A simple sign can cost upwards of $150, this would not include any additional text, logos, or photos. 

Additional costs

Many realtors will create flyers or brochures to hand out at open houses or around the neighbourhood, the time spent to create these, printing, and distribution are all at the sole cost of your agent. 

While it may seem that agents are making extremely large commissions, they are also extremely high expenses, and we haven’t even touched on paying taxes, employment insurance, etc.

There are countless costs that your agent will need to pay on a per listing, monthly or annual basis that you may not be aware of. It’s always best to have a conversation with your agent about the costs in advance so that you’re aware of everything upfront.